John Madigan (Victoria, Independent) Share this | Link to this | Hansard source

My question is to the minister representing the Minister for Industry and Science, Minister Ronaldson. The east coast gas market has changed due to the trebling of gas demand from LNG exports and the increases in gas prices being demanded by gas producers. The recent Deloitte Access Economics modelling showed that the higher gas prices will have impacts across the whole economy from manufacturing and agriculture to construction and transport. This is on top of the impacts to pensioners who are struggling to heat their homes and the thousands of Australians who will simply be unable to pay the new gas prices being demanded. When will the government address the approaching loss of over 200,000 manufacturing jobs that this will cause and the impacts upon every household of these increased gas prices?

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I thank Senator Madigan for his question and also acknowledge his long, deep and abiding interest in this matter and for giving me some advance notice of his question. I will say at the start that I do not agree with the assertion that there may be a loss of over 200,000 manufacturing jobs due to increases in gas prices. However, I will say to Senator Madigan that the government shares your concerns regarding gas prices that are faced by consumers and industry. That is why we worked hard to deliver the abolition of the carbon tax, and this has directly benefited Australian households and businesses by placing downward pressure on gas bills.

But the senator is, indeed, absolutely right that natural gas has an important role to play in Australia's energy future, and we have been very clear that we support the responsible development of gas. State and territory governments, which have primary responsibility for onshore development, are the main regulators of the activity. Australia has ample reserves of natural gas to meet both domestic and export demand, and the challenge we face, as Senator Madigan knows, is getting the gas out of the ground in time to meet the needs of gas users. The government believes that increasing overall gas supply is the best way to ensure customers have access to competitively priced gas and an assured supply. Queensland and South Australia have multiple projects underway, whereas some other states have halted the development of gas resources, placing pressure on available gas supplies and gas prices. The government will continue to work with state governments to ensure that adequate gas supply is maintained and that domestic customers can access a competitive price.

John Madigan (Victoria, Independent) Share this | Link to this | Hansard source

Mr President, I ask a supplementary question. Can the government explain why Australian households and businesses are being hit hard by increases in gas prices when world prices of all petroleum based products, including oil, gas and LNG, have halved in recent times? Is there any link between the fact that most of the gas production here in Australia is controlled by a small group of producers and competition is almost non-existent.

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

I will just say to Senator Madigan that this, of course, is not a straightforward issue, and I extend an invitation to you to discuss these matters personally with the minister, if you would like to do so. In direct response to your question, as I said before, onshore development is largely a state responsibility, but this government has always supported the responsible development of world-class gas resources. As older gas fields become depleted they have been replaced by new sources of gas that are deeper, tighter and more costly to develop. As I said earlier but I will say again, we believe that increasing overall gas supply is the best way to ensure customers have access to competitively priced gas. The gas on the east coast is also becoming an internationally tradeable commodity, with the development of technology that can liquefy natural gas and transport it overseas. I appreciate the senator's point in relation to these increases. The spot prices for gas in international markets has also fallen, and I would expect that, as the Australian market links more closely with the global market, there will also be pressure— (Time expired)

John Madigan (Victoria, Independent) Share this | Link to this | Hansard source

Mr President, I ask a further supplementary question. Minister, we do not have time for further review and ad hoc answers. Given lower world prices of petroleum products, why are government policies continuing to enable the subsidising of cheap gas exports to regional manufacturing competitors at the expense of Australian jobs and Australian manufacturers?

Michael Ronaldson (Victoria, Liberal Party, Minister for Veterans’ Affairs) Share this | Link to this | Hansard source

Senator Madigan, I do not think I have been able to do appropriate justice to your question in the time allowed. Minister Macfarlane will assist you with that. I would note that consumers are not subsidising exporters and the gas market is competitive and supports different deals at different times. It is these deals and these contracts with customers that underpin investment and supply and transport infrastructure. Australia has ample reserves of natural gas to meet both domestic and export demand, and there are many opportunities that come from being part of the global market. In Queensland, for example, where the first big projects are underway to develop CSG for export, regional areas are flourishing. In Queensland, gas projects will create 30,000 construction jobs and 17,000 ongoing jobs from 2020, and Australia's LNG exports are expected to grow nationally to over $60 billion in 2017-18. Many of these are state issues. But the government agrees more need to be done to— (Time expired)